This paper compares and contrasts some of the science and public perceptions of the role of forests in relation to the water environment. It is suggested that the disparity between the two perceptions needs to be addressed before we are in a position to devise and develop land and water policies (whether market or non-market based) which are aimed at either improving the water environment, and by doing so improving the livelihoods of poor people by greater access to water, or conserving and protecting forests. Examples are given of three research projects in South Africa, India and Costa Rica where, through the involvement of stakeholder groups, often with representatives comprising both the science and public perceptions, interactive research programmes were designed not only to derive new research findings with regard to the biophysical processes but also to achieve better “ownership” and acceptance of research findings by the stakeholders. It is concluded that to move towards a reconciliation of the different perceptions and to put in place better policies and management systems, where policy is better connected with science, will require further efforts: a) To understand how the “belief” systems underlying the science and public perceptions have evolved, and how these are affecting land and water policy processes; b) To develop management support tools, ranging from simple dissemination tools, which can demonstrate the impacts of land use decisions on the water environment to institutions and local people, to detailed robust and defensible hydrological models which are needed to help implement the new land and water policies, such as those now being implemented in RSA; and c) To understand better how land and water related policies impact on the poorest in society. It is argued that many present policies may not be significantly benefiting the poor and may even, in some situations, be resulting in perverse outcomes.